In this paper we challenge the theory of change behind the Mexican Conditional Cash Transfer Programme Oportunidades, by questioning whether it sufficiently addresses the structural factors that prevent its poorest group of beneficiaries, indigenous people, from climbing out of poverty. Conditional cash transfer programmes like Oportunidades make cash transfers conditional upon school attendance and accessing health care services. The theory of change is based on the human capital theory and predicated on individualistic understandings of poverty, assuming that higher levels of education will ultimately translate into higher salaries and better jobs and thus break the intergenerational transmission of poverty.

We argue that the particular situation of indigenous people poses programme-specific and structural constraints on the 'one-size-fits-all' application of Oportunidades and challenges its theory of change, thereby compromising its effectiveness in both the short-term and long-run. The remoteness of indigenous communities and the higher levels of marginalisation compromise Oportunidades' performance in terms of coverage, outreach and targeting for indigenous people and may exacerbate and reinforce the groups' marginalised and disadvantaged positions in comparison to the non-indigenous population. One of the shortcomings of the programme's theory of change is an insufficient focus on constraining factors in the market, unequal access to good quality education and health care services, as well as different capital and asset levels of individuals who enter the job market. Higher levels of human capital can be an important condition to achieve higher levels of income, but unequal opportunity structures may seriously inhibit the successful progression out of poverty for different groups of poor people.

Oportunidades has had remarkable positive impacts, such as increasing school attendance and facilitating access to health care services for the poor. But in order to be transformative, it needs to be responsive to particular vulnerabilities and it needs to address the underlying causes of poverty.